Energy price increase is good news for China

China’s recent wave of domestic energy price increases is very positive both for the nation’s economy and for relations with the major net oil-importing industrial economies. The latest, a 10 per cent retail price increase three weeks ago for refined oil products, was the seventh since 2005, and came just three weeks after I predicted such a rise in an article in China Daily.

The domestic price increases make China consume less energy than it would without the price increases. In addition, they pay for alternative forms of energy both renewable and environmentally friendly, and they make China’s economy efficient and stronger by prompting it to produce the same output from less energy, and by enabling Chinese energy companies and investors to earn a profit that gets efficiently reinvested in the economy. They also increase China’s national security by making China less dependent on imported oil than it would be without the price increases.

China Daily